campaign style event with lots of talks about taxes but little mention of spending cuts and these where we begin this hour of "america live." welcome, everybody. i'm megyn kelly. moments ago the president gathering with a group of taxpayers to encourage americans to put pressure on congress to make a deal on raising taxes on the wealthy. but we heard no mention of congress dealing with our soaring debtor deficit spending, or where spending cuts of any type might come or how we are going to address the larger issue: we all know that tax hikes on the rich ain't going to get it down. progressive groups reportedly held a private meeting with senior obama administration white house officials. according to the "washington post" the groups were told not to worry about any entitlement reforms or big budget cuts. the so-called safety net programs according to them are not going to be touched and the progressive groups walked away feeling very happy. the report say the white house

feels it does not need to compromise, period and is willing to let the big tax hike happen on everybody. the big tax hike is what everybody will face not just the rich or the middle class. they think they'll be in a better position to negotiate with the g.o.p. after that happens. chris stirewalt joins me, host of power play on foxnews.com. >> i was a little frightened, i thought something i, really bad was happening instead of the standard badness. megyn: that is terrifying. [laughter] back down to business, the progressive groups, the union groups meet with white house officials and are very happy, which, you know, strikes fear down the spines of republicans out there i suppose. but can it really be that president obama does not plan to compromise at all?

>> well what the president is trying to do and you heard it today, you mentioned it in his speech. what the president is trying to do is set aside the issues of taxes and the looming spending cuts and redo the negotiation that they had in the summer and say, don't bring in your healthcare reform stuff, don't bring in your medicare, don't bring in social security, focus exclusively on the question of whether or not you will raise taxes in order to offset these automatic cuts. the white house is trying to portray this as a one-for-one deal that they are going to renegotiate what they already negotiated in august. they say if republicans want less spending cuts on the defense side they better be willing to give up on the tax side and have tax increases. i think they are perfectly willing as it stands now to take it off the cliff and let the taxes go into effect, because if the republicans won't give them what they want on a tax rate increase for top earners they think they will get them later once people are outraged that their taxes went up. megyn: but, to not offer any

spending cuts, what would be the republican incentive to agree to raising taxes on the wealthy if they don't get anything in return? >> well, the incentive would be from the president's point of view, is that everybody's taxes will go up anyway and once you get to the other side then it's much less likely that you can get a deal done that does anything to protect those folks in the small business owners, or the folks in the lower end there, the $200,000 end of the spectrum. from the democrat's point of view once -- from these democrats points of view, once you've jumped the cliff and you're on the other side it's a question of what republicans will accept. now the republicans are hoping to have something to say about what actually goes into it. megyn: i mean is this window dressing? because it looks like the tax hikes, however you want to phrase it, rate, hikes, oring lo happen on the wealthy, right?

taxes are going to go up on the wealthy. both sides admit that that is not going to solve the problem. it's going to make a teeny, tiny dent in the problem. that there has to be a more comprehensive approach. the simpson-bowles guys are like, all right. i realize that politically, that makes sense that you can make the rich have higher taxes, but what about the big picture? it's the tiniest fraction of the big pie. >> the president says we'll get to that later. he wants to get the win right now. demonstrate to his political pwaeurbgs the same folks that he had at the white house, demonstrate to these people, look gearing to break the backs of the republicans on this issue. we will make them accept higher taxes for ho top earners. and later we'll come around and deal with the bigger issues. republicans are looking to start

laying the grounded work for a big deal now. what the president is trying to do is break the back of the republicans right now on the taxes to offset the spending cuts that republicans don't want on the military, and then once the republicans are in disarray then look about making a dole on entitlements. republicans are rightly skeptical. megyn: what would the republicans -- right now the republicans don't want to raise taxes on the middle class. you can use the term as president obama does holding the middle class hostage. what they are trying to do is hold the one chip they have to bargain and that is the tax hikes on the middle class. they don't want to give up the farm of tax increases on the wealthy -- in other words, if they give it all up now then they won't have anything to bargain with after january. if they already agreed to tax increases on the wealthy and that goes into play when we get to the middle -- and the middle class is protected, what do the republicans have to bargain with? >> nothing. this would not be a good time

for the republicans from a bargaining standpoint in terms of getting what they want, which is the tax reform, rewrite of the tax code, dealing with entitlements. unless they get stuff now they are not going to get it later. they are much less likely to get it later. the president figures they can take them right up to the edge and their nerve will break at the end facing a tax increase for all federal income tax payers. that enough of them will come over to expose top income earners. this is becoming a very dangerous game. the closer we get to the end it's becoming very dangerous. the likelihood as the president takes this smash mouth approach the likelihood of jumping this cliff gets higher and higher and higher. megyn: thank you, chris. sorry for scaring you. >> i'm better now. megyn: i don't know if i am. and you know it's an appropriate thing to do because today in "kelly's court" -- we have a good "kelly's court" today, it's so good. i was looking forward to it all

morning, i'm still looking forward to it. we are going to scare the you know what out of you. say tuned for that. the negotiations over tax hikes and spending cuts have been a hot topic at the daily white house press briefings the past couple of days. the press secretary jay carney holding the briefing now. he'll face questions on whether president obama this is spending cuts should be part of that deal. he has previously said it was on the table. now he is saying this is all about tax hikes on the rich period. w-pd to thwhat happened to the spending cuts? we will have a live update from the white house a little later in the show. we will be monitoring this. another story developing in washington right now in a new round of senate meetings for u.n. susan rice. she is going back after yesterday, it didn't go so well, she is going back. she will answer questions about the white house response to the

consulate attack in benge, libya on 9/11 of this year. many political observers think she is trying to win supporters for a possible nomination of secretary of state. she would have to be confirmed in the senate. senator bob corker earlier said miss rice's statements may prove she is too political. the meeting between susan collins, she expressed concerns too. she is not known as a republican fire brand but she expressed concerns. these meetings come a day after three top republicans said they were more concerned about libya now after meeting with rice than ever before. here is senator collins a short time ago. >> i asked ambassador rice why she did not qualify her comments more, in light of this contradictory reporting from the president of the country.

her answer was that she relied on our intelligence analysis. i don't understand why she would not have at least qualified her response to that question. megyn: coming up we'll see how a new round of capitol hill appointments went for a ambassador rice this morning and what kind of implications they could have on her future. is she likely to be our next secretary of state? would she get confirmed given all we've been following in the news lately. we'll follow it, moments away. a new round of violent protests in egypt as the nation's islamist president faces growing opposition to his unprecedented power grab, basically saying to the courts in egypt i don't have to listen to you. i'll do what i want e. says it's temporary. demonstrators clashing with police outside of tahrir square. this comes as the appeals report

suspends work to protest the decrease that gave mohammed morsi near absolute powers. steve harrigan is live in cairo with the very latest, steve. >> those protestors are out again for the 6th night in a row at tahrir square scuffling with police. we've seen exchanges of rocks and teargas on both sides, several protestors coming away injured, police injured as well. nowhere near the numbers we saw last night where as many as 200,000 demonstrators were in the square. they are demanding not only that the president pull back on his decrease but the entire government gets toppled. judges from two of the courts including the appeals court has gone on strike. they say they are not going to work again until the president takes a step back. we are seeing no comprises from president mohammed morsi. in fact we are hearing from his supporters in the muslim brotherhood that they plan on staging major marchs across the nation on saturday in support of mohammed morsi.

they have kept their distance perhaps trying to reduce of conflict between two sides. megyn: steve harrigan thank you. new safety measures being put in place to protect the world from a dangerous historic site. trace takes a look at the enormous cleanup challenges at the now crumbling tomb that is the chenoble nuclear plant. >> a prank started like this. and ended with the victims of the prank looking like this. truly terrified elevator passengers and the potential liabilities involved in these practical jokes. and growing concerns that u.n. ambassador susan rice may be be too political to become secretary of state. laura ingram is here next to discuss how a new round of capitol hill meetings went for rise this morning after yesterday's meetings created some drama.

>> at this point in time if president obama were to nominate susan rice to be the next secretary of state would you support that nomination? >> i would need to have additional information before i could support her nomination.

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megyn: a new round of meetings and a new round of criticism in just the last hour over u.n. ambassador susan rice what she said about the consulate attack in libya and her possible nomination as our next secretary of state. miss rice meeting a short time ago with two top republican senators, kwopb o one of them, bob corker who is worried that ambassador rice is too political and not independent enough. he suggests the president needs to think twice here. >> i would just ask that the president step back away from all the buzz around this particular situation and take a

deep breath and decide who is the best secretary of state for our country at this time. megyn: joining me now fox news contributor laura ingram. welcome back. it seems clear that they are getting ready to nominate her, does it not. two days in a row going up there taking a beating by some of these republican senators are not big fans of miss rice. the obama administration, you tell me seems to be getting ready to name her notwithstanding. >> i don't know. it's sur just, megyn. they had that initial ferocious opposition by lindsey graham and kelly ayotte and john mccain, a big press conference and really took a stance. the administration decides to send her up to try to repair things. they come out of the meeting, she obviously didn't graduate from any washington charm school, because even kelly ayotte it looked like they had just lost their best friend after that meeting. they were not happy. then there is another round of meetings and cork eri corker is

saying he should withdraw the nomination. megyn: he said she would make a better dnc chair, that is debbie wasserman schultz job. >> it seems like a classic obama set up of the republicans. this is a way to bring up the whole war on women, meaning that republicans really don't understand women, look they don't have any female chairmen of their committees on capitol hill. they didn't get any of the female vote, and they just don't get it. they are doing this to this poor woman, and she is a great person and a great public servant. to me it seems like there is a political reason for continuing to, you know, trot her before the senators when they know it's not going to fly. megyn: really? the republicans would never support a black woman as secretary of -- oh, wait, wait.

>> something there just sits very -- to me it seems odd. i think ultimately if i had to bet maybe they'll nominate her to a position that she doesn't need confirmation for, like national security adviser. maybe that is what is in the offing. but the way this has gone down seems very odd. if she wanted to charm the senators i imagine she's capable of doing that, right? i imagine she could say, look, i did the best i could. i'm sorry the information wasn't correct. i'd love to work with you. i'm going to be an independent public servant. i'm going to work for the american people as secretary of state, she could do that. she is a smart lady. something -- something about this whole journey seems very odd to me. megyn: that is very interesting, because you are no left-wing pundit and there is a left wing pundit over on another cable station who came out with an op ed today saying susan rice is handling this perfect and she is

doing exactly what the white house wants her to be doing, keeping the story alive, making mccain and other republicans look bad in this pundit's view and that they are taking the bait. how is it taking the bait to explore what she said, whether it's real, an an ambassador and three others died. >> we don't know what happened in these meetings. for the time aobg i being it doesn't look like we are going to get any answers. why was susan rice sent out in the first place, that still has not been answered. she didn't know what was going on in benghazi. apparently she really knew nothing, because she repeated talking points that on he their face were not right. before the briefings, i'm talking about her area of expertise is not benghazi. i mean she is a u.n. ambassador.

why was she initially shown these documents? the whole thing is odd, and you have to believe that president obama, or his team, valerie jarrett, whoever is responsible, they are very smart, very smart politically. susan rice is a powerful image for this administration. she is an african-american woman, very well educated, well-spoken and they put her out there to repeat these talking points. then when she is questioned the republicans could be perceived in some quarters to look insensitive, or somehow they are not giving hernandez due, not respecting her. megyn: didn't we just have a black woman as our secretary of state under president bush? >> she is a republican. that is a whole different deal, megyn, you know that. that is a very bizarre thing in american politics. someone who is block and a conservative, or black republican, they don't get the boxes checked quite the same way. i think there is something very odd about this whole thing. megyn: i want too ask you something separate and apart from susan rice. related to her. the big question was who changed

the talking points, who took al-qaida out and thought this was a good idea. all these intel heads went up to capitol hill a week and a half ago and said we don't know, it got passed around to so many people. even james clapper the director of national intelligence said i just don't know, i'm sorry. a couple of days later his office came out and said, we did it, we did. we're like okay it's the dni's office that changed the talking points. during these meetings that susan rice had with kelly ayotte she went there with the acting f.b.i. director. and he said it was actually the f.b.i. who changed that. then they call back later and say, forget that, it was us, it was the cia. >> it's like the keystone cops. in the wizard of oz goes the scarecrow goes like this. which way did it go. each pointing in another direction. whether it's the keystone cops and it's shear incompetence, or

something else is going on here to me as an american it's not -- we don't even knotphao*eub was e f.b.i. wasn't on site for three weeks. megyn: great to see you. dick durbin will talk about income dave repbgsin differentials in this country. we'll talk about it.

megyn: some are calling it the scariest prank ever but it also may be the funnist. however, in between the laughs and the gasps are horror there is a real question about whether this brazilian tv show crossed a legal line with its ghost in an elevator prank. watch.

♪ [screaming] [laughter] megyn: everyone here thinks it's funny, but the question is, is it legal? there could be potential

liability here, and we will debate it in today's "kelly's court," i'm taking your tweets on it, follow me@megyn kelly in between now and the court. this one is not so funny. off we go to russia and new worries about the world's worst nuclear nightmare. more than 25 years after the meltdown at the chernoble tpaoubg lar plant workers in the soviet republican of ukraine are beginning to build a giant cap over the facility's still dangerously actor. trace gallagher has that story live from l.a. >> after the disaster the first reaction was to try and cap the radiation, right, to kind of contain it. so what they did is they built this concrete unit around reactor four. at the time they called it the 10,000 year tomb. it turns out the shelf life of that was only about 30 years, which is up in four years, so now they are in the process of building a new structure that looks kind of like a giant kwan

sit hut or an ark. about as tall as the stat you've liberty. the plan is to kind of slide this thing using railroad tracks overreactor number four and then begin to dismantle the reactor. one of the big concerns you have is they have that big smokestack or chimney on reactor number 4. they have to tear that thing down and with that you have all kinds of radioactive material. the problem is even when this dome is put over the reactor is only contains radioactive material, it doesn't actually contain the radioactive waste, or the radiation if you will that comes out of it. to this day the town around there is evacuated, 115,000 people, mandatory lee evacuated. 28 people died, but 6,000, mostly children threatenedded up developing thyroid cancer and many have died. engineers say maybe, maybe in a hundred years, megyn, a hundred years they can turn this whole area into a tourist attraction

because they believe it will finally be clean enough to approach. 18 miles around it you still can't get near it. megyn: wow, even that seems optimistic. thanks. new research suggesting the american people may be missing a bigger and scarier story as washington focuses on the deaths of four americans in benghazi, libya on 9/11 of this year. we will look into a report that benghazi was not the only attack by al-qaida on american interests that day. plus, a leading democrat is blasting the income inequality in america, like the pay difference between a hedge fund manager and a navy seal, saying it's immoral. but do we really want washington to have the say on who makes what and whether it's moral? our panel debates. and the college accused of censoring the word christmas from a christmas tree sale. the story goes positively viral and it doesn't end there.

♪ i wish you a merry christmas. i wish you a merry christmas. i wish you a merry christmas and a happy new year. ♪

oh, let me guess --ou see this? more washington gridlock. no, it's worse -- look, our taxes are about to go up. not the taxes on our dividends though, right? that's a big part of our retirement. oh, no, it's dividends, too. the rate on our dividends would more than double. but we depend on our dividends to help pay our bills. we worked hard to save. well, the president and congress have got to work together to stop this dividend tax hike. before it's too late.

inspiration. great power. iconic design. exhilarating performance. [ race announcer ] audi once again has created le mans history! [ male announcer ] and once in a great while... all of the above. take your seat in the incomparable audi a8. megyn: fox news alert, brand-new reports that an egyptian court has just sentenced eight people to death in absentia. most of them are american and they are all on charges linked to this anti-islam film that

sparked riots in parts of the middle east. among those convicted is the man behind the film, mark basile, yus erbs f. he is facing a year here in america and ow on an unrelated matter. he was on probation and they had him arrested after the film became viral and it was the cause of some of this protest and suggested that maybe making the film was a violation of probation. egypt has taken it up a notch. florida-based pastor terry jones was also sentenced. most of them live in the united states, all are outside of egypt and are probably unlikely to ever face the sentence. they say the court found the defendants guilty of harming national unity, insulting and publicly attacking islam and spreading false information

through the film that mocks the profi prophet muhammad. >> a senator saying it is immoral to have big pay disparities. he says hedge fund managers make as much in a couple of minutes as navy seals do in an entire year and is arguing to a progressive group that that is wrong, morally, socially and he says it's destructive and tears apar aeu a part what holds us together. with all due respect to the navy seals, he's right they don't get paid enough. his report is that it's socially wrong and it's immoral for there to be a pay disparity like that in this country. monica your thoughts.

>> first of all the united states was built on the idea of equality of opportunity not equality of outcome. what you have now, megyn is a modern democratic party which is not your father's or grandfather's democratic party. what you here from barack obama, harry reid, nancy pelosi, dick durban is not lowering all tax rates to get economic growth. you have a modern democratic party that is so far to the left that they believe in sunday amount alley anti-american concepts of radical wealth redistribution in order to equalize everyone. that is not what america is all b. the leading party that is leading the country in terms of the white house and congress really believes that by force, i don't mean by military force like the old school communist and social lists did, but by force of the tax code and redistribution of policies like obamacare they intend to force that on the american people.

megyn: keurs te megyn: durbin chose two good people to make that example of. people don't love and reveer the hedge fund manager, they make other people a lot of money and they make a lot of money but most people have respect for our navy seals. is he on point? >> i do think he's on point. what monica just said, radical redistribution, we are talking about the radical redistribution is going back to the clinton era tax rates. i mean that just doesn't strike me as radical redistribution. you can argue about whether or not you think those tax rates should go up because of how it may affect the recovery, but to suggest that it's somehow stealing from the rich to give to the poor, we are talking about 3 or 4% average points in the tax code. i think this is really over blown. and i'd also say when jfk was president we didn't have the kind of income inequality that

we have today. it is so much greater and getting so much greater every year that i think if he was alive today that he would be exactly where most democrats are on this issue with what senator durbin said, it's a problem. megyn: but you can argue about, we need to tax the richmor and srich rich more without disparaging the day differential. he had a moral objection to the fact that the hedge fund manager makes so much more than the navy seal, and without dissing the navy seals in think way, doe anyway, does very a point? it seems like the country has long had professions that are very tphoerbl that just don' very noble and are not paid well et paid very well.at a >> you have the freedom in america, megyn to choose which path you wanted to go. if you want to serve your country and be a navy seal you go in nothing maybe the pay

scale isn't what a hedge fund pay scale would be, but you choose that path. you are going to be a teacher, knowing you won't make as much money as going into investment banking let's say. that's what america is all about the freedom to be able to choose and not having government policy trying to equalize everybody. when she talks about the jfk move to lower tax rates too get job creation and economic growth he understood that. what the modern democratic party is doing is setting that aside and saying, we don't care, we are putting ideology first instead of pragmatism. we could make an argument that we should go back to the clinton tax rates but we should go back to the clinton era spending leafs. he was paying 18% of gdp. barack obama has ratchet eud up to 24 or 25%, that's what i mean about redistribution. megyn: it's not so much the defending the tax hike, kirstin

it's about is there an attitude -- because president obama got in trouble for making a comment along these lines a while back. i think we have it. standby. we have it. we do. >> we are not trying to push financial reform, because wiebe grudge success that is fairly earned. i do think at a certain point you've made enough money. but, you part of the american way is, you know, you can just keep on making it if your providing a good product or service. we don't want people to stop -- megyn: so, you know, i do think at a certain point you've made enough money. durbin, is he saying something similar? >> i think they are. i completely agree witness. this hypermaterialism in our country, i think he's right. how much money does a person need? it doesn't mean the government needs to come in and take it, and there is still no evidence yet that's been presented that the government is actually going to take money and give it to

poor people. i've yet to see that. but i think that as a country we need to be concerned about how we value people. and we are not valuing the navy seals the way they need to be valued. i think when -- why now -- what has happened that suddenly a ceo makes a hundred times more than they used to? what value are they adding? is the government coming in and fixing that no. can we have a conversation about it? i completely vehemently disagree with what you're saying, monica. some of these people choose to do so. we should value those other people more. there is a drastic, drastic difference. we are talking about hundreds of millions of dollars in difference. >> so what. megyn: people make choices based on their own desires and lifestyle choices and so on. i could speak to this myself when i made some decent money as a lawyer and decided to chuck it for a job that paid $17,000 a year, my first job in tv and i

got psychic income at the time. i was happy. i didn't care about making the big dollars any more at that time because i just wanted a life. now maybe you can argue you shouldn't have to make that choices specially if you go into the armed services, monica. but it times like there are two different visions of america and the choice is we make. >> yes, this is what america has always been about. it's about risk and reward. people who take big risks, yes, they can get huge rewards in america. >> the navy seals aren't taking big risks, monica. >> hold on. i am talking about. >> like a hedge fund manager is. >> the market in america that does risk and rewards, i'm not talking about the military per se. i'm not -- that is comparison. i'm talking about a basic philosophical point about how america was originally designed. >> if you risk your life it's not worth as much as risking something for a hedge fund. >> don't put words in my mouth. the equality of opportunity,

that's what america was supposed to be that it would clear the path to allow you to go and do what you want to do. okay without any kind of government obstacles here or the government coming in and trying to equalize everybody, that is socialism and that is anti-american. megyn: go ahead, kirsten. >> nobody wants to takeee kwaeult. we artake away equality. we are talking about how we value people. there is something as skew when we place such a high value on people, just this whole idea that they are the risk takers. there are many people taking larger risks with their lives than a hedge manager. megyn: the navy seal goes to bed knowing what he's done, and the other field knows what they've done. we'll leave it there. taking your thoughts at twitter. follow me@megyn kelly. americans may be missing a larger and scarier story amid the focus on the deaths of four americans in libya.

we'll look at why one analyst compared 9/11 of this year to vietnam, the offensive, and al-qaida, and why the story is being overlooked. >> a father along with his young son phaubgd the girl wit mocked the girl with satisfactory raoebl pau satisfactory raoebl palt see. wait until you hear what happened to him. [ male announcer ] if you're eligible for medicare,

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who accepts medicare patients. and you never need referrals. if you're thinking about your options, call today. megyn: new questions today over whether the attacks on our consulate in benge, libya, that attack was part of a larger offensive that day from al-qai al-qaida. did it involve more than four separate attacks on and around september 11th. thomas jocelyn is a senior fellow at defense. you're saying we are focused so much on benghazi in this country but missing the bigger picture. describe what that picture is. >> the original store row was the attack in benghazi started with upon stain just violence by

the antiterrorist film. now they say it was the result of a protest earlier that day in cairo. if you start to investigate that protest in cairo you see al-qaida's fingerprints in that also. there was an assault on the u.s. embassy in yemen, and tun t u.ntunis. you can find specific individuals with known ties to al-qaida that were involved with all four. megyn: for any particular reason other than they generally hate us? >> this goes to the larger point of what al-qaida is trying to accomplish. on september 10th before this all began al-qaida released a video in which they were talking about al-qaida's ideology was alive and how they needed to get revenge for a top leader who was killed. there was a terrorist attack in

benghazi on september 11th. their ideology has not been killed by the arab spring but is is alive, that is part of what this is all about. megyn: does it show a level of command and control that we have been led to believe by some al-qaida no longer possesses in >> you can't prove that. none of us are in the room with them while they are taking about these matters. you can deduce based on all these facts and there are a lot of them that al-qaida was involved in four separate instances. megyn: how does it square with what we were told by the u.n. ambassador susan rice, that al-qaida is on its heels, it's been decimated, how does it square. >> that is a point that it all gets to. ambassador rise is talking about how it's decimated and a spent force. the president and others have made this claim as well. al-qaida has evolved and changed and mutated and given the events of the arab spring and the four separate assaults show that. we see how al-qaida is evolving. they are showing their cards about how they are actually mutating to this new threat

against us. megyn: how would you describe the new mutation? i mean what are they today versus what they were? >> a big part of what they are trying to do right now, remember the al-qaida brand has been hurt in the muslim world because of the inch kiss criminal nat violence against muslims. the primary victim of al-qaida's terrorism are muslims. they are trying to reband and say they are the real vanguard of all muslims and the ones protecting sharia law across the muslim rule. these instances that you can see, you can see these groups involved. megyn: we've heard a lot of talk abou that group. there has been some push back from in particular some folks on the left saying that is not an al-qaida affiliated group. >> i would say this about ansar al sharia in libya it is still hurricaneee in libya.

there was a report sent to the library of congress that talked about the ties to al-qaida and i don't think they can be downplayed. megyn: thanks. i appreciate it. new questions about political correctness and the holidays as we get reports that one community college took the word christmas itself out of a student campaign to sell christmas trees for charity. questions? anyone have occasional constipation, diarrhea, gas, bloating? yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ female announcer ] live the regular life. phillips'. campbell's has 24 new soups that will make it drop over, and over again. ♪ from jammin' jerk chicken, to creamy gouda bisque. see what's new from campbell's.

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megyn: new questions about free speech and political correctness after a community college in north carolina tells a student group it cannot use the word christmas to promote a christmas tree sale.

tree sale? is that how they went to market? >> reporter: this is western piedmont in north carolina. every year necessity sell christmas trees to buy christmas gives for immediately kids. they filled out all the proper paperwork and submitted it to the college. the college said sure sell all the trees you want, but you cannot sell them as christmas trees, you can only sell them as holiday trees. all their paraphernalia, their newsletters would r were changed to say holiday trees. customers got upset and many refused to buy. so one of the students to sent the alliance defending freedom who sent a letter to the school. saying removing christmas is a blatant viewpoint discrimination

in violation of the first amendment and the school took a second look and said after a thorough research they came to a much better understanding so they took steps to fix their mistake and change the term from holiday tree back to christmas trees. so the school again reconfirmed to us, this was an honest mistake. the christmas trees are back for sale and the grinch is foiled again. megyn: the kids had to change the flyers back again. wonder how much money was left over for charity when all was said and done. >> do you live in what "forbes" magazine calls a death spiral state? we'll tell you what you should do to protect you're finances if you are one of the unlucky ones. an elevator prank terrifies people. they start out looking normal. you can see what happens.

"kelly's court" on the potential liability looming. followup to a father and son accused of mocking a girl with cerebral palsy. >> any time she sees him. if she sees him out the window. new prilosec otc wildberry

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megyn: fox news alert new fallout from the fiscal cliff talks. the white house facing tough questions about what's really on the table when it comes to a big deal with republicans. i'm megyn kelly. we detailed the report last hour from an influential political blogger how some union reps and progressive groups held a private meeting with white house senior officials yesterday. these groups were told not to worry about entitlement reforms or big budget cuts as part of this deal.

ed henry asked the white house, are federal spending cuts part of this package or not? >> when asked about pressuring democrats you said he vowed to do that in the future. >> he has done it in the past and he will do it in the future. he committed every time he talks about this to a balanced approach that includes -- revenues, spending cuts and savings through entitlement reforms. megyn: ed henry joins us now fresh from the exchange with mr. carney. what happened there? >> reporter: it's a big story that's developing. all along there has been an assumption on both sides that we were talking about everything. the so-called brand compromise that there would be spending cuts. in addition to tax increases on the rich. which is something the president had campaigned on.

earlier today when the president had an event at the white house following on that meeting you mentioned with unions yesterday he highlighted the idea of just focusing in the short term on this tax changes. the president said that would give us quote more time next year to work together on a comprehensive plan to bring down our deficit. what i pressed jay carney on is he now splitting this negotiation into two. let, deal with raising tax on the rich, lowering tax on the middle class. take a listen. >> the republicans are saying on the hill today -- baron had a news conference that said so you are trying to lock in tax changes, then you are not having any spending cuts now. you want to do spending cuts next year. is that a fact? >> it's not a fact. these are all parts of aspects of conversations that are ongoing. >> reporter: it' ongoing. er in noncommittal and what they

are going to do. jay carney says they have a plan on the table to achieve savings in medicare and medicaid. as you know, the big part of this story developing is top democrats like deck dur begin in the senate are saying they don't want to -- don't want to deal with changes to medicare and medicaid. so you have republicans like john boehner the house speaker saying you can't just make tax changes in the short term and promise down the road you will cut spending, you will reform medicare. this is where the debate is headed. both parties are split even more than we have seen with this development. you have the white house suggesting they want to deal with the tax part of this. and the republicans saying let's see the spending cuts. megyn: i don't see -- what would make the republicans in terms of just a sheer bargaining power.

what would make them agree to tax hikes on the rich if they didn't get spending cuts? it's the one thing they don't want and they are holding sort of those middle class taxes and the other side they are holding them hostage, right, the democrats say that. but they are sort of holding out -- we are not going to raise tax for anybody until we get our spending cuts. >> reporter: jay carney in one of his other answers to a question suggested the pressure on republicans and everyone, is that there is a deadline on the so-called fiscal cliff which is if you don't deal with those tax changes in short term. then you go off the cliff. and that could have a strong impact on the economy meaning the white house believes there will be a political backlash against republicans if the president can blame them for going over the cliff and holding out. we'll see, there may be republicans like john boehner and eric cantor say we are not

going to give in and maybe we'll go off the deliver. earlier todayers ski today -- es said there is a chance we are going over the cliff. that can rattle markets. megyn: a new piece of polling from rasmussen reports suggests that half -- suggests a growing number of americans are worried the economy will be worse off a year from now. 50% express that concern. that, 27% increase from october. just 34% think the economy will be stronger. that pop comes as one of the writers at "forbes" magazine identified a phenomenon called the death spiral states. these are 11 states where private sector workers are

outnumbered by people dependent on the government. if you plan on buying a home or investing your money there you may be putting your hard-earned dollars at significant risk. melissa francis. you love it. >> reporter: i never get tired of hearing you say this. megyn: i noticed one of the states is new york. >> reporter: absolutely. there are two factors that put a state on the death spiral list which i like because it's very dramatic. one is one of the things you are talking about, the ratio of takers versus makers in the state. "forbes" isn't trying to be mean. what they are talking about is people who receive a check from the state so they could be state workers, welfare recipients or pensioners versus those who send a check into the state because they work in private sector. they made that ratio. for example, in california, that ratio is bigger.

if you own a software company that employs 100 people, you are supporting 139 people in the state on that other list that work for the government or are welfare recipients or pensioners. the other factor they looked at was credit worthiness. they took a statement, what is their debt load for paying for all of this. what is the business climate like. how many businesses are leaving the state because of regulation. home values. they also looked at the unemployment rate. that's the credit worthiness. the death spiral states had a ratio of takers to makers greater than one. so 100 people supporting 139 others or they were in the bottom half of credit worthiness. there were 11 states that came out with bad factors on both sides. surprisingly. new mexico was at the bottom of the list. they had 153 takers per 100

workers. mississippi, california, alabama maine, new york, south carolina, kentucky, illinois, hawaii, and ohio were states that were on this death spiral list. texas did really well, not surprising there for every 100 workers. only supporting 82 people on the payroll. what was the takeaway other than being depressed? they say a lot of times you can't control where a job takes you. if you have a job in los angeles you probably don't want to buy a house. it would be better to rent it. megyn: are they saying the market is going to tank? megyn: in norkt real estate market isn't so bad. >> reporter: it makes it harder if you have to leave the state. they also think the climate is going to eventually hurt home values. they won't rise as quickly or on average. it's basically different many

more likely you would have higher taxes levied on you. whether it's 3r079 tax, income tax. they are saying you may have to leave because businesses are leaving. if you own a home and you have a job in one of these states you could get transferred out. there is a likelihood your company would leave. megyn: how soon do they predict the doomsday scenario. >> reporter: there isn't a time horizon. but if you look at the pension crisis in california and new york you see things starting to come to a head. you look -- there are towns in california that have gone bankrupt that are now not paying out, and this is becoming a huge issue in court how they will handle this going forward. we see a lot of these problems coming to a head and you don't know how it will play out over time. they are saying staley kid, stay mobile. don't own muni bonds. megyn: never say muni bonds on

"america live" ever. my viewers get it but i don't get it. it has something to do with government that may pay money or may not. >> reporter: can i say "money" with melissa francis? megyn: see you tonight. fbn. harry reid's controversial efforts to change the senate rules to keep republicans from being able to stop legislation. remember the filibuster? it's used about it party not in power to stop legislation and judicious nominees. democrats love to do it when they were the party not in power. but they have had a change of heart now that they are in power. this is significant, the president getting behind the efforts. we'll talk about it. the judge weighed in in the case of a far i -- of a father and so

mocked a little girl as she got off a schoolhouse. we'll tell you what happened when the father met the judge. >> it makes me sick to think that a grown man would tease a 10-year-old disabled girl that has never done a thing to any of them for no reason. now she doesn't wants to get on the bus to go to school. we have big dreams.

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megyn: big news from the white house as it joins in on senator harry reid's efforts to change it rules of the senate. he has been push for changes to the filibuster. a tool that helps the party not in power -- dates' the republicans in the senate -- prevent a vote. mr. reid would like to make it more difficult for the any mort

party to filibuster. the white house applauding harry reid's efforts. but rewind that to when the democrats were the minority party. mr. reid was a vocal supporter calling it a last check against abuse of power. joining me to explain. president obama said at the time -- in 2005 we had a president bush in the white house. the republicans controlled the senate and the house. the only way of stopping certain legislation at the time was in some cases to filibuster. the legislation or in many cases president bush's judicial nominees. and there was discussion --

there was discussion among republicans about getting rid of the filibuster it was never meant for this purpose. let's blow it up. let many get rid of it. and at the time this is what then senator obama said. everyone in this chamber the senate knows if the majority chooses to end the filibuster, then the fighting, birthsmen and gridlock will only get worse. i know republicans are getting lot of pressure to do this. we need to rise above the ends justify the means to all the people, not just those wearing our particular party label. times have changes. >> hare said that would be a sheer act of quote brute force. so they obviously changed their position. and they are changing their position when since 1917, the filibuster as we know it has been in effect.

there have been filibusters since the beginning of our congressional session since the found of our country. but the current rules requiring filibusters have been in place since 1917. megyn: our viewers may not know what you are talking about. >> to get a piece of legislation through right now even if you have 51 votes, that's not enough because of the filibuster. the senate rules say 60 is the number. the senate sets its own rules. but here you have the opportunity to exercise the nuclear option because the president decided it's more beneficial to his agenda. these were the two most vocal critics of the republicans even discussing the possibility of a nuclear option in 2005 with judicious nominees. it took the gang of 14 to come up with that compromise so that

filibuster was not eliminated. they had that gangs of 14 to work through the judicious nominations. megyn: it used to be back in the day if you were the party out of power. you need 60 votes to get a vote on legislation. you need the 60 votes to say we'll have the vote. so you do have some power if you are in the minority in the senate. but it used to be if you wanted to filibuster it was a true filibuster, they used to bring cots in and somebody would stand up there and read the phone book. then they passed some rules and said now you can just say filibuster and it's done. harry reid wants to get rid of the filibuster for a lot of matters. he wants to get rid of the right of the minority party to hold up legislative matters. >> that's as broad as it can be. what else is there?

judicial nominations? unless they change the rule -- if they exercise the nuclear option what stops them from saying we'll apply that to jew dix nominees. there is a legal question. can you get this vote for this true change without having the 60 necessary, and of course a lot of people's views is you can't do that. this would be a dramatic change in the way our legislative branch of government operates. it would be a power grap grab. the republicans were class tides for discussing it in 2005. now you have harry reid and the president weighing in saying let's do it. these were the two most vocal opponents of it 7 years ago. megyn: if you wonder how important the filibuster can be, it came up with respect to the healthcare debate. the democrats had 60 votes, but then scott brown won ted kennedy's old seat. and they weren't going have enough votes to get the actual

healthcare law passed in the senate if they needed another 60 votes because scott brown was that last person who could helpful buster. they changed the rules to alloy to you push it through with 51 votes. it's been used on major legislation. whatever party is not in power. this is dangerous for senator reid. >> sure it is. watch out what you are hoping for here. when the republicans are black power and this is -- in our republic that happens. the republicans are in power. the republicans are in power. how is minority leader harry reid going to feel about the filibuster being gone? they will be objecting to it. all the things republicans can be saying if this takes place. be careful what you wish for. the reality is this would and dramatic reshaping of the entire way in which the legislative process is run. remember the senate was supposed

to be the body of the legislature that would allow for cooling off so cooler heads could prevail. kind of like the house of commons being aggressive in the bedmaight the senate. this does away with working it out and is a complete shift. it's the nuclear option. the impact and ramifications will be felt for generations and it will come back on the democrats when they are the minority. megyn: they like it while their party is in power, but thinking about another george tbhusht white house and a republican senate and have you can house they don't like it so much. we'll see what happens. coming up, new concerns about the president's plan to avoid tax hikes and spending cuts associated with the fiscal cliff. especially a campaign-style warning to middle class voters. it may be more about the 2014 mid-term elections than fiscal

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megyn: an update of a father and his young son who made fun of a girl with cerebral palsy when she got off the school bus. it landed him in front of a judge. reporter: when this appalling video came out. the man walking with his 9-year-old son mock the limp of the 10-year-old girl, he said no at first wasn't mocking her at

all. in fact i was just reacting to my son being teased. then he later changed his story, i wasn't mocking her, i was walk that way because i hurt my ribs and i hurt my back at work. the family of hope didn't buy it saying he had don't many times before which is why the grandmother went down to the bus stop and kate on cell phone video. >> it makes me sick to think that a grown man would tease a 10-year-old disabled girl who has never done a thing to any of them for no reason. now she doesn't want to get on the bus to go to school. >> reporter: the family went to authorities and that man pleaded no contest. the judge gave him the maximum sentence which is 30 days in jail. bailey then turned around and issued an apology to the family

saying please step my apology. both those families have been feuding for years. so the apology may not mend any fences, but william bailey will get a chance to think about the limp for 30 days in jail. megyn: let's hope the family learned a lesson on that one. look at these photos. one of the most terrifying hidden camera pranks we have ever seen. this is how the women looked before and this is how they looked after. but cot pranksters be in legal trouble? that's coming up in "kelly's court." new questions about the president's approach to the debt

deal with the republicans. the fiscal cliff negotiations. the tax hike negotiations. we don't know what's in the deal. syndicated columnist charles krauthammer is saying president is interested in destroying republicans in advance of the next mid-term election. fair and balanced debate coming up. >> this is a political attack on republicans. there is no evidence right now that he has any interest in the real fiscal issue because he would have to talk about spending and entitlements and he isn't.

megyn: deadly developments out of syria. two coordinated car bombs rocking the capital of damascus. a car bomb ripped through commuters, and as they rushed to help another bomb won't off. a syrian newspaper report says the attack targeted those loyal to bashar al-asaad. new questions about president obama's approach to the fiscal cliff negotiations. taxes are going to go up and

there will be massive defense spending cuts come next year if they don't do something on capitol hill. we showed you at the top of the hour how the white house was grilled about what spending cuts are being negotiated to avoid these pending cuts we are about to get which many feel are draconian and whether the wt wants to raise them and deal with them or postpone them until the new year and what sense would that make. last night syndicated clemmist charles -- syndicated columnist charles krauthammer says the president is not serious about solving the country's fiscal problems and claims his strategy is to drive a wedge between republicans. he pointed to a lack of discussion over spending cuts as

evidence. >> why would the republicans allow the entire debate to be over taxes when obama is proposing on raising the rates on the 2% is i triviality it will reduce the deficit from 1.10 trillion to 1.02 trillion. 8 cents on the dollar. it's nothing. it's lunch money. it's a rounding error. yet that all the debate we are hearing. obama understands this. he's not trying to fix our fiscal issues and problems. he's trying to destroy the republicans by insisting that there is a split among the republicans on this issue which has held them together same way it destroyed president bush senior when he went back on the pledge he made. this is a political attack on republicans. there is no evidence that he has any interest in the real fiscal issue because he would have to

talk about spend and entitlements and he isn't. megyn: joining me now, marjorie clifton and noelnickpore. >> i have a hard time understanding what motivation president obama would have for not getting the deal done. this would potentially send us into a recession reflecting negatively on his economic policies. when issues in the middle east are rising and there is instability. there would be no benefits in my opinion to him not getting the deal done. everything he has been saying in the media has been focused on getting this deal done. megyn: with krauthammer saying he doesn't want to get a deal done or saying it's all about taxes and not mentioning spending cuts? >> a little bit of both.

the bigger issue is raising tax an imperative? absolutely. that's something he saw as a mandate coming out of the election. but absolutely, the spending cuts will be an issue and it will be his responsibility to strong arm some of the democrats who are putting their feet in the and. but i think he acknowledged a willing news to compromise. spending cuts have to be part. megyn: he did say at that press conference he held 10 days ago that spending cuts would be on the table and he did want to look at that. yet the reporting we talked about earlier is he had a meeting with progressive groups yesterday and they emerged very happy believing that wasn't going to be the case. that they were going to emerge happy because he wasn't going to touch any of the so-called social safety net programs.

>> charles krauthammer is right it's a dog and pony show. does -- is obama wants to us believe that if the republicans don't act -- if we don't increase taxes, that we are going to fall off this fiscal cliff? because there is another part to this cliff, and that is the spending. cut the spending. megyn, we all know, these taxes are not going to amount to much of anything at all. it is the spending that is enabling us. megyn: speak to that point, marjorie. what a teaspoon in the ocean this is they are fighting over. the rich people are going to pay it? even if they get that tax hike on the rich, it does so little. >> all of them are pieces after bigger puzzle. all of these things have to happen in tandem. what i will say is people like lindsey graham and

representative steve king who have been long in their position and are respect republicans taking a national station on the issue of tax hikes indicates the conversation is happening in the back room, the conversation is happening and they are promising. why else would they parade around taking a stand that's causing trouble within the party? we don't see all of this. a lot of this happens behind closed deers and what the media picks us is -- picks up is a different thing. megyn: what do you think? isn't that what we are discussing in where are the other things on the table? >> i'm outraged about this. when we have got 33 open senate seats coming up and the republicans are look at this. the seats pretty hard. this is about cutting spending. where are we not going to get

this? obama is acting like i want to work with the republicans if they will only come to terms with these tax and give way. this is about spending, too. yes, a little bit of taxes. the bigger picture is about an entitlement program and cutting this spending. enough. megyn: wouldn't it be interesting if the republicans said you want tax hikes on the rich, you got it. then said, now the base in your court, what is your plan for reducing the deficit on the debt. would you please let us know what you want to cut. >> i think that might be wildly effective. we ought to look the this like a poker game. if anything what that would do is put the onus on democrats to stand by what they are saying in this compromise. if republicans are willing to do it i would love to see nothing more. a compromise does have to happen.

as ronald reagan would say you have got to give 10% to get 90. megyn: the republicans -- they are not going to do that, are they, noel, they don't seem to believe tax increases are what's needed. >> it's not a republican problem. this a democrat entitlement problem. >> grover norquist talks about -- to be fair, he put a lot of republicans in a tough spot. you have got lindsey graham and steve king saying we understand it's a different day. megyn: this is what charles krauthammer. he says you are doing the same thing president obama is doing, making the debate about republicans and grover norquist rather than the huge deficit spending and the debt. >> here it comes down to the spending. even if the republicans go okay,

forget grover norquist. the democrat, obama, they are not doing their part, point made. >> we'll see, we are not there yet. megyn: ladies, thank you so much. coming up. we want to show you what happened in this elevator that took freedom this point -- to this point. we'll debate whether the pranksters behind this are about to wind up in legal trouble. we'll show you have the tape next in "kelly's court."

but when i was in an accident... i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. so i never missed a beat. that's health in numbers. unitedhealthcare. megyn: "kelly's court" is back in session. an elevator prank meant to make

people laugh, but is it legal. a brazilian tv showing people stepping inside an elevator and getting more than a lift. watch.

megyn: we are sick here because we are laughing. some top lawyers are not laughing and they are argue that this is not lawful and this show could get side for this behavior. really? joining me now arthur aidala and jonna spilbor. >> i'm not laughing. megyn: it's hysterical. >> that's mean. megyn: but it's funny mean. >> we did a segment about someone crazy gluing the toilet seat. someone could have a heart attack. megyn: they did not. they could have had a heart

attack. >> that close enough for me. did you see that dude running out? meg are was very scared. >> you get in the elevator. the lights would come out. the little girl would come out from the trap door and the lights would come on and she would start screaming at you. >> what would be the claim? >> intentional infliction of extreme emotional disturbance. you are trying to freak people out. that's what you are doing. it's clearly intentional. this isn't a mistake. what are you trying to do? you are trying to get them very, very upset. megyn: what is the difference between this at one end and me hiding around the corner when my husband is wake up -- >> it's a matter of degree. it's a matter of degree. >> this was just a joke.

i would have suffered a head injury from hitting the ceiling but nobody suffered a heart attack or fell down and hurt themselves. megyn: this gal seems genuinely scared. >> a couple of them wearing. but they are not damaged. if you don't have damages you can't have a lawsuit. megyn: what about the risk. my favorite is the guy who does this like my children because they don't think you are there anymore. if they can't see you, you are not there. the guy ran down the hall and she chased him. what if there had been some kind of heart attack. what if they argue there was trauma. >> they would need to show some significant treatment by a

psychologist or psychiatrist. but let's face it. if somebody got sick, if they didn't know somebody was taking microglycerin for a heart attack, this segment would be very different. meg when i watched it, what if someone hits this kid. it's suppose to be a scary ghost screaming in their face. it's a fight or fight. >> she was a good little actress. my goodness. she was. that to me that was the biggest risk that this child could have been put in danger. the adults can't ride an elevator again for the rest of their lives? >> it's not like going to a haunt the house because there is no ai am shun of the risk by these people.

>> nobody knows anything. if you want to go on another level. this youtube video has been seen by 6 million people. they are using their likeness. did anyone sign a release? you can watch me freaked out by a lunatic by 6 million people. there is some way somebody is making money off this. megyn: 1.6 million. >> i just looked it up it's a lot. it's just not a good idea. megyn: you are right. the producer are wrong. they correct themselves. megyn: what about the humiliation they face when the video goes viral? >> they might be able to get some sort of relief from that. but if this is a show chances are they got a release from these people after they camed them down and got a shot of the whiskey. megyn: the poor man running down the hall, would you sign this?

>> maybe they were paid to be on this show. that would take the wind out of their sails. megyn: i don't know. i always said i have the humor of a 9-year-old boy. this does appeal to me. but i'm making your thoughts on this. let us know. follow me on twitter @megynkelly. structured settlements. the experts at imperial can convert your long-term payout into a lump sum of cash today. as part of a heart healthy diet. that's true. ...but you still have to go to the gym. ♪ the one and only, cheerios

megyn: the traditional sound of the holiday season. but in one community the salvation army bell ringers almost became the ghost of christmas past. alicia we understand you have good news to report just in time for christmas. >> reporter: i do have some good news. we are able to report it here first. it turns out the salvation army bell ringer has been saved thanks to the generosity of one

of the local business owners. right behind me the wind & grand hotel worked out a deal with the mayor of colorado strings to allow the salvation bell ringer to stand on his courtyard area and ring the bell there throughout the christmas season. this came after lathe night's vote by the city council that passed a panhandling and soliciting ordinance that prevents any type of solicitation. that unfortunately included the salvation army bell ringers. that also includes people like the girl scouts. it includes just about everybody. so people were pretty upset about the bell ringers not being a part of the downtown christmas experience here in downtown colorado springs. over the last 24 hours the city and the owner of the hotel were able to work out a deal to move the bell ringer from public property which the business

owners were more concerned about the panhandlers and people bothering customers and move them down the area so the bells will continue ringing. megyn: coming up, a bevy of bouncing baby boys. en we got ma. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

>>megyn: a potentially record-breaking weekend if a hospital delivery room. 19 baby boys. born if a row in a minnesota medical center. or was it 62 straight hours this hospital delivery room saw nothing but newborn baby boys. the hospital staff saying necessity have never heard of anything like this before. >> have not seen a streak like there. >> i delivered baby 18 and we realized that the number was hi